This hour, the CIA officer who was called on to kill Osama bin Laden after 9/11 tells us why the terrorist mastermind got away. Plus, Anthony Principi, chairman of the Base Closure and Realignment Commission, on the Pentagon‘s recommendation to shut down 180 military bases nationwide.

But, first, “Newsweek” magazine late today retracted an investigative report about the U.S. military‘s use of the Koran during interrogations at Guantanamo.

“Newsweek” editor Mark Whitaker explained their decision.

(BEGIN VIDEO CLIP)

MARK WHITAKER, EDITOR, “NEWSWEEK”: We are going to, in the wake of this, review all of our practices. Obviously, there‘s a lot of talk, not only at “Newsweek,” but elsewhere, about the use of unnamed sources. But I think we have to push as hard as we can to identify who our sources are and give our readers at least some sense of who they are.

MATTHEWS: The story in “Newsweek” magazine, which has an online cooperation agreement with NBC News, sparked rioting in Afghanistan and Pakistan and led to the deaths of at least 17 people.

HARDBALL‘s David Shuster report.

(BEGIN VIDEOTAPE)

DAVID SHUSTER, NBC CORRESPONDENT (voice-over): In Afghanistan, the anti-American protests have been the most violent since the fall of the Taliban government three years ago. In Jalalabad, four protesters have been killed and more than 60 injured. And, across the border in Pakistan, the demonstrations have led to the deaths of at least a dozen protesters.

The firestorm began two weeks ago. In this “Newsweek” magazine, dated May the 9th, there was a short periscope item about an investigation into prisoner abuse in Guantanamo Bay. U.S. military investigators, according to “Newsweek,” were ready to report that American interrogators had flushed a copy of the Koran down a toilet. The item was from Michael Isikoff, “Newsweek”‘s veteran investigative reporter.

This weekend, he told “The Washington Post”—quote—“We relied on sources we had every reason to trust and gave the Pentagon ample opportunity to comment.”

“Newsweek” says that, before the item was published, a senior Pentagon official was asked, is the story accurate or not? After the story went to print, Pentagon officials raised no objections for more than a week. In Pakistan, the article was translated and used at an anti-American news conference. Al-Jazeera then mentioned the story repeatedly and, last Tuesday, rioting began. But, last Thursday, at the Pentagon:

GEN. RICHARD MYERS, JOINT CHIEFS CHAIRMAN: It is the judgment of our commander in Afghanistan, General Eichenberry, that in fact the violence that we saw in Jalalabad was not necessarily the result of the allegations about disrespect for the Koran, but more tied up in the political process and the reconciliation process that President Karzai and his Cabinet is conducting in Afghanistan.

SHUSTER: By Friday, though, Pentagon officials were rethinking the riots. They called “Newsweek”‘s reporting false and demanded a retraction. Over the weekend, “Newsweek” reviewed the story, learned its original source had incomplete information, and apologized.

DAN KLAIDMAN, “NEWSWEEK” D.C. BUREAU CHIEF: We feel terrible about that. And what we‘ve done is to acknowledge the mistake we made, try to figure out how we did it.

quote—“Based on what we know now, we are retracting our original story

that an internal military investigation had uncovered Koran abuse at

Guantanamo Bay”

Pentagon officials say the U.S. military does not have any obligation to review every potential story. And they add, the responsibility for getting the story right rests with the reporter. Still, the reputation of American interrogators has been awful for more than a year. Last spring, there were the abuses at Abu Ghraib and since then there have been stories about Guantanamo Bay.

ERIK SAAR, FORMER ARMY INTERPRETER: In one instance, fake menstrual blood was wiped on a detainee‘s face, so he would then not be able to gain strength from his relationship with his faith and his relationship with his God.

SHUSTER: Others who worked at Guantanamo Bay say interrogators forced detainees to look at pornographic magazines, which Islam forbids. And British detainees released from the prison say guards routinely cursed Allah and mocked the Muslim faith.

(on camera): In Muslim countries, religious disrespect can be an explosive matter. It is why the Bush administration is now trying to put the focus on “Newsweek” and move the focus away from the reputation that military interrogators earned on their own.

I‘m David Shuster for HARDBALL in Washington.

(END VIDEOTAPE)

MATTHEWS: Thank you, David.

Let get the latest from the Pentagon today from NBC‘s Jim Miklaszewski.

JIM MIKLASZEWSKI, NBC PENTAGON CORRESPONDENT: Well, well, as you can well imagine, Chris, there‘s a lot of finger-pointing here and a lot of “I told you so”s. But senior Pentagon officials are being a little more circumspect about it. In fact, Secretary Rumsfeld himself up on Capitol Hill earlier today was critical, but careful in his comments.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, SECRETARY OF DEFENSE: People lost their lives. People are dead. And that‘s unfortunate. And people need to be very careful about what they say and just as people need to be careful about what they do.

(END VIDEO CLIP)

MIKLASZEWSKI: Now, being careful ourselves, here‘s what we think we know about what happened.

One of the defenses that “Newsweek” has made about going to press with the story in the first place is that the Pentagon did not deny the allegations when they were asked about them, about throwing the Koran into a toilet at Guantanamo Bay. But we‘re told that senior Pentagon officials did in fact tell “Newsweek” that, one, that specific allegation was apparently not included in any FBI e-mails and was not included as part of an ongoing investigation into detainee abuses at Guantanamo Bay, as outlined in those FBI memos.

But one official told us this afternoon, Chris, that nobody here at the Pentagon could categorically deny that it didn‘t occur, because, as you know, this is a huge complex. It is a huge military. And it is impossible to account for every minute and every action of U.S. soldiers or Pentagon employees. So, they could not categorically deny it. But, once the story was printed, they in fact launched a separate investigation into those specific allegations.

And they eventually found that there were—quote—“no credible allegations” in regard to that specific charge that somebody, some M.P. at Guantanamo Bay in fact desecrated the Koran—Chris.

Michael Vickers is a former special forces officer, as well as a former CIA officer. He is currently at the center for Strategic and Budgetary Assessments. Roger Cressey served as a member of the National Security Council during the Clinton and the Bush administrations. He is now a terrorism analyst for NBC News. And Robin Wright is the diplomatic correspondent for “The Washington Post.” The Washington Post Company, by the way, owns “Newsweek” magazine.

And the question is, the long-term consequences. Now, we have to segregate two issues here. “Newsweek” is wrong in their coverage. They admitted that. They didn‘t have their facts straight in asserting that the Army has desecrated the Koran as a way of getting at these prisoners. But there‘s a lot of discussion, anecdotal and otherwise, about other uses of religious intimidation by our interrogators.

MICHAEL VICKERS, FORMER SPECIAL FORCES OFFICER: Well, this really underscores the volatile nature of the global war on terrorism. Detainees have charged for a while, for—going back a couple years—about abuses.

But when an organ like “Newsweek” lends its credibility to it, then you get the violence that you see and things like this can happen repeatedly. Interrogators have guidelines not to specifically do anything to desecrate the Koran or offend religion, because the U.S. wants to keep this conflict, as it should be, as an intra-Muslim struggle, where our adversaries are trying to turn it as Muslim against U.S.

MATTHEWS: Let me ask you, Roger, do you know about whether the United States uses religious intimidation to get information out of prisoners?

ROGER CRESSEY, MSNBC COUNTERTERRORISM ANALYST: No, I don‘t. And it shouldn‘t be the policy of the United States to do so.

The objective down at Guantanamo and some of the other detention facilities are two-fold, one, to get current threat information from the detainees, and, two, to develop a better understanding of the network within which they operate.

So, there are tools and techniques they use to try and extract that information. But when they cross the line, like it appears they‘ve done here, there are serious negative consequences down the road. And that‘s what‘s playing out on a global basis right now.

MATTHEWS: Robin Wright, “The Washington Post,” it was Howard Kurtz‘s piece today. He says, there is a lot of charges—a lot of charges have been made by detainees about the use of religious intimidation against the Koran—not the Koran especially, but against the Islamic faith to get information or to break prisoners. What is your understanding of our tactics?

ROBIN WRIGHT, DIPLOMATIC CORRESPONDENT, “THE WASHINGTON POST”: Well, the charges go back more than two years.

The “Newsweek” magazine is not the first one to report allegations. The difference is, in the past, these have been claim by detainees. The difference was that “Newsweek” cited American officials, which gave it a bit more credibility.

The interesting thing is, the Pentagon in January 2003 developed a very detailed three-page policy on how to deal with the Koran that included the fact that no one but a Muslim chaplain or a Muslim interpreter could touch the Koran when giving it to detainees, that they had to put on clean gloves in the presence of detainees before they handed them the Koran.

There are specific instructions if they‘re trying to look at the Koran,

whether it is being used for other than religious purposes, such as holding

something secret, passing messages, whatever, how it should be opened, page

by page, at what angle.

And it is it says that the Koran must be handled always with the right hand, rather than the left, in respect for the Koran and practices in the Islamic world. So, if these practices, or if there were violations, they would be quite serious violations, because there‘s an explicit policy that even says the Koran must never be placed anywhere near a sink, a toilet, a floor, a wet place, or near the feet.

MATTHEWS: And it is also a prescription against any use of the Koran except for religious purposes, right? It can‘t be used for any other obviously intimidation tactic.

WRIGHT: That‘s right. And it is very specific, detailed. It is interesting that this policy was developed fairly early in the process of Guantanamo Bay.

And—but I think what is different today, in terms of these accusations, is, it comes in the post-Abu Ghraib world. And there are much graver suspicions because of mistreatment of—which was well proven—by U.S. soldiers of Muslim detainees and that one of the reasons there‘s been such a reaction today, when there hasn‘t been in response to earlier articles, is because there is just a much deeper and broader suspicion of the United States and its attitude toward the Islamic world today.

MATTHEWS: OK, let me go back to Roger Cressey.

Now, in terms of the world situation, we know that we‘re at war with zealotry. People are willing to give their lives, suicides, because they feel that their religion and their culture are under threat by the West, whatever, fairly or not. Is this going to help the war on their side?

At one level, this is still a war of ideas. And for those who are fighting against us, this is a great example for them to say, I told you so. See, the Americans say this is not a war against Islam. But look at them desecrating the most holy symbol.

MATTHEWS: Will they believe the corrections in a page from the “Newsweek” magazine this week?

CRESSEY: We could only wish. The first image is the one they keep. And perception is reality and that one image from the “Newsweek” article is what is going to be used by our opponents, by the jihadis. And we‘re going to have a difficult time.

MATTHEWS: So, this is a really tragic snafu by “Newsweek.”

WRIGHT: Oh, it‘s a tragic snafu, a two-paragraph article that has lasting damage to U.S. policy, to preventing the clash of civilizations that everyone has feared.

MATTHEWS: Right.

Worse than Abu Ghraib?

WRIGHT: No. But it could have a wider damage than just the Arab world.

In today‘s “Washington Post,” Howard Kurtz, who writes about the media, said—quote—“U.S. officials have confirmed numerous reports by detainees, especially at Abu Ghraib, about guards attempting to humiliate them with tactics that violate religious taboos of the Muslim faith. A senior Pentagon official has confirmed reports that female interrogators rubbed their bodies against men, wore skimpy clothes, touched them provocatively and pretended to spread menstrual blood on them.”

Robin, gross topics here, of course, but does this admission by “Newsweek” that they got their story wrong exonerate the military?

WRIGHT: Well, clearly, we‘re dealing with a conflict now between journalistic practices and military practices. And the administration is trying to point the finger at the media.

In this case, we‘re kind of in a purgatory of not knowing which account is true, how deep those violations were, how true they were. And that is where the story is going to play out. Tragically, it plays out in the West and the United States particularly. And it will not resonate. The nuances don‘t get to people in downtown Jalalabad, where they barely have electricity, much less access to the Western media.

And, later, the CIA officer in charge of finding Osama bin Laden after 9/11 says the war in Iraq took us off the terror mastermind‘s trail. I‘ve heard that argument from a lot of people.

You‘re watching HARDBALL on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: The Pentagon on Friday announced its base realignment and closing list. According to the list, about 180 military installations, including 33 major bases, will be closed. Now the list is being reviewed by the Base Closings Commission, which heard testimony earlier today from Secretary of Defense Donald Rumsfeld and Joint Chiefs Chairman Richard Myers.

Former Veterans Affairs Secretary Anthony Principi is the chairman of the Base Closings Commission.

Welcome, Mr. Chairman.

ANTHONY PRINCIPI, CHAIRMAN, BASE CLOSINGS COMMISSION: Good evening.

MATTHEWS: Is there any objective way to decide which bases to close?

PRINCIPI: Well, certainly. It is—it is based on justification and data that the military provides us. It really stems on four military value criteria and four other criteria that relate to economic impact on the communities being affected by those closures.

PRINCIPI: Indeed, although military value has a priority under the law. We also need to look at Secretary Rumsfeld‘s force structure plan, which is based on the threat assessment to the country over the next 20 years to ensure his recommendations are in conformance with that force structure plan.

MATTHEWS: You know, I was up in the Northeast this weekend, as well as in the Midwest. And, up in the Northeast, they feel they‘ve been hit hard by this. Do you sense any pattern of focusing these cuts on the Northeast, which voted against the president?

PRINCIPI: No, not at all. New England does get hit hard, though. You‘re absolutely right. New London Naval Base, Portsmouth Naval Submarine Shipyard, Brunswick, are hit very, very hard. But there are other bases in the red states, like Texas, that has 16 base closures, although some of those bases benefit from the returning forces overseas.

So, it is across the board. California does better than expected.

MATTHEWS: Yes.

PRINCIPI: Florida did better than expected.

MATTHEWS: I heard the Southwest had it pretty good.

PRINCIPI: They did have it very, very good. Nevada, Arizona and California did fairly well. Some of the other states, North Dakota, South Dakota, Texas, as I indicated, even Georgia, many base closings in Georgia, although some of the other bases are going to be picking up some of those forces.

So, it is all over the country. As you indicated, there are 180 bases, 33 major closures, 29 realignments, and about 790 smaller realignments and closures. It is going to be a long, hot summer for the commission to analyze this data.

MATTHEWS: Does the commission have to come up with replacements if you decide not to go along with a closing?

A lot of these realignment and closures are linked to another. So, there may be a closure of one base in one state, but it is linked to those forces going to another base. So, if we change that around, it is like a daisy chain. And that‘s what makes this round of base realignment and closures the most difficult and complex in the four previous rounds.

MATTHEWS: So, you don‘t have to come up with a $30 billion cut overall?

PRINCIPI: Well, it is about a $50 billion savings over the next 20 years, with a $5.5 billion net recurring savings every year thereafter.

MATTHEWS: Do you have to meet that standard?

PRINCIPI: No, we do not. We do not. We do not. We are certainly going to look at cost saving. That‘s part of it. What‘s the return on investment? You‘re spending all this money to close this base. What is the offsetting cost savings? So, we‘ll look at that. But that‘s not determinative.

Military value, national security is the most important, Chris.

MATTHEWS: What about all these guys and women losing their jobs?

What is going to happen?

PRINCIPI: Well, you know, that‘s where Defense comes in, Department of Commerce and the other agencies of government. They have to be involved with the community to help with the economic readjustment.

You know, many bases that have been closed in the past, the communities have done very, very well in economic development. But you have other locations where they‘re isolated, where you have cities that have grown up around a military base.

PRINCIPI: You close that military base, you basically close down the city. Those are the areas we really need to look at carefully. And, certainly, Defense has a responsibility to get in there and help those people with job training, transferring people to other locations around the country.

MATTHEWS: Well, the president owes you a lot. Maybe the country does, too. What a tough job you have got, Mr. Chairman. Thank you very much for coming on the program tonight. And please come back and tell us how it is going, Anthony Principi.

“Newsweek” magazine has retracted its story that Guantanamo Bay interrogators desecrated the Koran. “Newsweek” has an online cooperation agreement, by the way, with NBC News.

Ken Bode is a journalism professor at DePaul University and used to be a correspondent for NBC News. David Gergen is an editor at “U.S. News & World Report.” And John Fund is a columnist at “The Wall Street Journal”‘s the online publication OpinionJournal.com.

Let me go to Ken Bode.

Ken, how bad a mistake was this? Tragic snafu? Horror story? What, the fact that “Newsweek” reported something that can‘t be proven?

KEN BODE, FORMER NBC NEWS CORRESPONDENT: Exactly. They got—and they‘re dancing. They‘re still dancing. They haven‘t told us enough yet. They said, well, we regret any part of the story that we got wrong. We don‘t know what we got wrong. We apologize for unspecified errors and so forth.

This was a very bad one. And it is, again, based on unidentified sources, which again piles on that big problem in American journalism. The problem with this unidentified source is, there are 16 people dead. The entire—we‘ve got an uprising in Afghanistan. And we really need to look at the use of unidentified sources when they lie to you, when they use you.

(CROSSTALK)

MATTHEWS: Do you think that has the fingerprints, you think, of someone who wanted to put out a bad story?

(CROSSTALK)

BODE: It looks like pretty much like “Newsweek” got hustled on this one.

MATTHEWS: What do you think, John Fund? Do you think this—you‘ve been writing about this on your blog site. Do you think this might get to the point where the journalists themselves say, wait? Their editors say, we don‘t care who your source is. We want to know who it is, because he has to pay for this.

JOHN FUND, COLUMNIST, “THE WALL STREET JOURNAL”: Well, first of all, we don‘t know it is someone in the military. It could be someone in another agency.

MATTHEWS: A senior official, right, yes.

FUND: Yes, exactly. It could be in the State Department. I think, if the source had any decency at all, given what they have apparently caused, they should step forward. I don‘t believe “Newsweek” should be required to reveal its source. We‘ve been through that recently.

But “Newsweek” should ask itself, if this person was acting in bad faith, do we owe him anything? The answer would be no, I don‘t think.

MATTHEWS: David Gergen, let me ask you about this. This is a classic for journalism school, of course, but also political science, because here we have a war we‘re fighting which isn‘t exactly a trench war or a war of firepower. It‘s a war of religion and culture. And this is perfect ammo for the enemy.

DAVID GERGEN, FORMER PRESIDENTIAL ADVISER: Absolutely.

And it has been exploited by the enemy. It was seized upon. And it was translated and then seized upon by people who are anti-American. And it has been used for their purposes to foment all this violence. But that does not let “Newsweek” off the hook, nor does it let the individual who gave them the story off the hook.

For starters, I think Ken Bode is right. There was an old rule at “The Washington Post.” If you got something from on background or a deep background from a government official, and that person lied to you, that person lost their immunity. I think “Newsweek” should unmask the individual who gave them this information, so that individual pays the price.

But, even so, Chris, there is a larger issue about American journalism that I worry deeply about. And sympathetic as I am to people who are trying to get out there and do a good job—and I know a lot of the people at “Newsweek,” as you do. And they‘re good folks. But they made a terrible blunder here.

And, in this case, they went with a single source, with an unnamed, anonymous single source, on something which is extraordinarily sensitive. And they blew it.

MATTHEWS: Let me ask you all before—John, you pick up here, because I think you know about this business, as well as the other two. All three of you know about this business.

Items columns, the whole beast itself, the idea of an item, rather than a full-fledged story. Every magazine now has—“U.S. News” has one. Periscope at “Newsweek” is well known. “TIME” has a little bit—thing in the front. Is there a lower standard for what gets into those items columns than gets into a major violin piece at “Newsweek”?

FUND: A good guideline is, if you have a scoop, it better be played like a scoop.

This story would have been a major story if they had just done one thing. They would have asked the source, do you have the report? Can you leak us a copy under confidentiality or can you at least read the text of the report to us, so we know we‘re not just getting some third-hand account?

MATTHEWS: Right.

FUND: If they had done that, that would have made it a much bigger story. And, frankly, I would have gone with it.

MATTHEWS: I wonder if they had the document, because they said a document, the southern command report to come.

Ken, is this an items column problem, that kind of dishy, little, guess what we have got? We have got a little sugar plum. Let‘s run it.

BODE: I think it probably is a little bit of that.

But I also think that, when I was practicing journalism at NBC News, there were certain rules about unidentified sources. You had to tell your editor who that source was, why he was in a position or she was in a position to know.

And because so many people died here as a consequence of this, the publication, I think there‘s a lot of anger out there. You can see it in the blogs.

MATTHEWS: Yes.

GERGEN: You can see it in the conversation today.

I think the public may have just had enough. And it may—if there‘s any silver lining, it may be that there will be a real push now to raise the standards in journalism, so that these unidentified, anonymous sources can‘t drive the coverage in the way this individual did.

(CROSSTALK)

MATTHEWS: The problem is, this is a quality publication we‘re talking about here. This isn‘t a stringer for a third-rate newspaper. This is “Newsweek” magazine, one of the best.

GERGEN: I agree. I agree with that. But if you‘ve got—if CBS is going to rush to judgment with regard to the Dan Rather story, if “Newsweek” is going to rush to judgment on about what American troops may or may not have done in Guantanamo Bay, if you‘re going to have the Joe Wilson wife outed in the way it did, there comes a certain time people say, hey, come on, guys. This is a profession.

(CROSSTALK)

GERGEN: It is not simply a loosey-goosey, anything goes, sell me whatever you‘ve got, some stories are too good to check kind of a, you know, place.

(CROSSTALK)

MATTHEWS: This is not quite in the category of reporting. This is predictions.

WOODWARD: In an era when you can become pope at age 78, Cheney looks like a teenager.

(CROSSTALK)

(END VIDEO CLIP)

MATTHEWS: OK. Let me go to John Fund.

Not exactly breaking news, but a breaking prediction. What do you think?

FUND: Well, the only way it would happen is if President Bush released Dick Cheney from his longtime pledge that the reason that he is such an effective vice president is, he is not looking out for his own political future. Bush would have to publicly do that.

If he were to do that, that would be a signal to everyone, to the vice president, we‘ve had the selection committee and you headed it up and guess what?

When we come back, former CIA officer Gary Schroen, risky mission to find Osama bin Laden in the days following the September 11 attacks, great story from him. He was there. He chased bin Laden, couldn‘t catch him.

This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: Coming up, the hunt for Osama bin Laden. We‘ll be joined by the former CIA officer in charge of finding the terrorist leader in the days after 9/11 -- when HARDBALL returns.

(COMMERCIAL BREAK)

(NEWS BREAK)

MATTHEWS: On September 11 of 2001, longtime CIA officer Gary Schroen was on his way to retirement. But a few days later, of course, Schroen was tapped to lead a risky mission into Afghanistan, a mission with two goals, link up with the Northern Alliance, the Afghan fighters the United States used to topple the Taliban, and kill Osama bin Laden. Gary Schroen chronicles his story in a new book, “First In: An Insider‘s Account of How the CIA Spearheaded the War on Terror in Afghanistan.”

SCHROEN: Kind of like that, yes. I kind of called myself the world‘s oldest commando.

(LAUGHTER)

SCHROEN: At 59 years of age. But it was something that everybody on the team—it was—we were grateful to have the opportunity to be the first Americans to attempt to strike back...

(CROSSTALK)

MATTHEWS: What struck most of us back here was how quickly we beat the Taliban and threw them out of the country and how sad we were we didn‘t catch bin Laden.

SCHROEN: It went about as well as it could have in the north, the northern areas. But the strategy was—we actually could have done it a lot faster had we bombed the front lines, the Taliban front lines, aggressively from the 9th of October, when the bombing started.

We did a lot of strategic bombing—quote, unquote—of Taliban back-line positions, which really had no real impact on the outcome of the battle.

MATTHEWS: Was the strategy to reduce U.S. casualties? And, if so, was that one reason why we let the Northern Alliance and the other local tribes do some of the work?

SCHROEN: I think that the Northern Alliance represented a major asset for our—achieving our goals. And it coincided with their goals, which was to defeat the Taliban and save their lives, really.

I think that, as we started, it wasn‘t a question of saving U.S. lives. Part of the strategy, the bombing strategy, I think, had to do with post-Afghanistan—post-Taliban Afghanistan. What role would the Northern Alliance and the ethnic groups in the north be allowed to play vis-a-vis the traditional rulers, the Pashtuns from the south? So, there was a lot of hesitancy about what to—how far to allow the Northern Alliance to go.

SCHROEN: No, really not. I don‘t think anybody on my team would have done something like that to bin Laden‘s body.

MATTHEWS: But was there a sense that the mission had to include proof that you had got him?

SCHROEN: Absolutely. And that was a question we had—we talked about at length. What if we do get him? How are we going to prove that he‘s there? Are we going to ship his body back? Would we ship his head back? Would we take his fingers?

(CROSSTALK)

MATTHEWS: When you were out there in hot pursuit of Osama bin Laden and in the months since, have you sort of gone to bed at night thinking that he is the desperado and you‘re the lone ranger trying to catch him? Do you have this sort of Jean Valjean or Javert approach to chasing this guy, like you‘re chasing this one man? It‘s a manhunt for you?

SCHROEN: I felt very strongly about it. I don‘t—I don‘t...

MATTHEWS: Tonight, are you thinking—when you go to bed tonight, are you thinking about why I didn‘t catch bin Laden?

SCHROEN: And we plugged it with what we thought were going to be tribal elements that would work with us.

MATTHEWS: And those tribal elements have made histories out of dealing..

SCHROEN: Out of dealing and the guys...

MATTHEWS: And the guy with the cash gets through.

SCHROEN: The guy with the cash gets through. And also bin Laden was well liked in that area.

(CROSSTALK)

MATTHEWS: OK, here‘s the joke I used to tell on the air, back when I was being somewhat frivolous about this horror, even after 9/11. I said, here‘s a guy who is a 6‘8“ Arab, which is certainly a unique height for an Arab to be. He is riding on a donkey. And he has got a dialysis machine.

MATTHEWS: To make it look like he would look like a guy on a donkey with a dialysis machine.

SCHROEN: With a dialysis machine strapped to his arm.

(CROSSTALK)

MATTHEWS: So he‘s in pretty good health, you think?

SCHROEN: I think he is in decent health. He probably has all the ailments that you would get living in a rugged area with...

MATTHEWS: Three points. I want to get to some really big—

Musharraf is a tough-looking customer, the head of Pakistan. He helped us pick up number three this past week. Do you think he has the stuff, the politics and the guts combined, to really want to help us catch number one, bin Laden?

SCHROEN: No, I don‘t. I think that the blowback, the political blowback, the reaction to the fundamentalists in his country, would be just horrific. It would shake his country to its...

(CROSSTALK)

MATTHEWS: It would be like our other friend Anwar Sadat getting tough with the fundamentalists in Egypt. That cost him his life.

SCHROEN: Same kind of blowback. They‘ve already tried to kill him a couple of times. The number three, al-Libbi, was supposedly plotting in collusion with these...

(CROSSTALK)

MATTHEWS: So, what is his game, to sort of finesse it, look like he is going to go after him, warm up the president of the United States, George Bush, enough to think he is trying, but not really to do it? What game is he playing, Musharraf?

SCHROEN: That‘s my opinion, is that he has dragged his feet about going after bin Laden up in the northern areas. They did make an effort in Waziristan, but that was a dry hole.

MATTHEWS: Is the ISI ridden with fundamentalists?

SCHROEN: Yes. Absolutely.

MATTHEWS: The Pakistani secret service.

SCHROEN: Pakistani.

MATTHEWS: Which is basically on the other side. They‘re against us.

SCHROEN: Well, the leadership isn‘t, but there are elements within the organization that run independently and always have.

MATTHEWS: This is really a politics-makes-strange-bedfellows situation, the United States in bed with a government that is not to be trusted in catching our enemy. At the same time, they‘re infested with people that don‘t like us who may be on the side of our enemy.

SCHROEN: That‘s kind of the situation we face there, yes.

MATTHEWS: We‘ll be right back with Gary Schroen to talk about whether the war in Iraq took us off the bin Laden trail. That‘s a theme we‘ve had here before.

This is HARDBALL, only on MSNBC.

(COMMERCIAL BREAK)

MATTHEWS: We‘re back with former CIA officer, a real hero, Gary Schroen, who led the first CIA mission into Afghanistan after 9/11 and wrote about in his new book, “First In.”

SCHROEN: Exactly. They weren‘t there then, when the invasion took place, in any numbers. And they are there in great numbers now.

MATTHEWS: That‘s what I believe. But can we defend the president‘s policy by saying, even though we attacked the wrong country, basically, went from Afghanistan, where we should have kept all our focus, to Iraq, that was a distraction—have we not set sort of a terrorist flytrap, flypaper over there, so they‘ll all go over there and fight us there and then we‘ll fight them there, and that‘s where we want to fight them? Could you make that case or is that too elliptical?

SCHROEN: I think I wouldn‘t want to go that route, to say that we were planning...

irascibly popular guy around here—we all like him. He‘s on the show all

· when he‘s on, we like him. He‘s a charming fellow.

He once admitted he had no metrics for judging the success of our antiterrorist campaign. In other words, he doesn‘t know how many people we kill in Iraq, how many people that is going to reduce the terrorist threat by. He doesn‘t know what really is going on in terms of the numbers of people coming at us right now around the world.

Based upon your work in intelligence in this whole world of Islamic terrorism, are we increasing the number of people coming to get us, ultimately, or decreasing them by our combined policies in Iraq and Afghanistan?

SCHROEN: I think that the number of terrorists, people coming after us around the world, is increasing.

(CROSSTALK)

MATTHEWS: Is it because we went to war in Iraq? Did we stir up the hornet‘s nest?

SCHROEN: I think that was—well, the combination. We marginalized, we took bin Laden and isolated him. He is still a threat. And then our actions in Iraq play to the exact theme that bin Laden and those who follow him follow and believe, that we are out to destroy Islam.

MATTHEWS: You‘re a 25-year-old guy. You‘re sitting in a coffee shop in Cairo right now. Who are you rooting for, us or bin Laden?

MATTHEWS: So, how can we be winning a war if, all over the Arab world, which is a huge world of a billion people, in those young men and women, especially young men, who are willing to give their lives to kill us, are being stirred up and frustrated every hour of every day when they‘re sitting, drinking coffee against us, how can this war be successful in the end?

SCHROEN: In the end, it is going to come down to—I mean, what we are doing in Iraq feeds into the basic tenets of Islam, that, if Islam is attacked, you are required to have jihad.

MATTHEWS: Is there any way we could have cut a deal with Iraq, with

Islam in the world, beaten down the terrorists with a deal? Could we have

· short of dumping Israel into the Mediterranean, which we are not going to do ever, is there anything we could have done to cut a deal with the Arab side, the ferocious people out to get us now?

SCHROEN: In my view, no.

(CROSSTALK)

MATTHEWS: So, we‘re just stuck with an enemy that just is going to grow out there and our best bet is to try to keep them at bay by not stirring them up too much.

MATTHEWS: That‘s the best deal we can have with the Islamic world is not to stir them up too much.

SCHROEN: Exactly.

MATTHEWS: I see why the president looked for an alternative.

(LAUGHTER)

MATTHEWS: I mean, I‘m serious.

When Colin Powell said the same thing to the president, what you‘re saying to me, the status quo means, we hope, if we don‘t cause too much trouble, they won‘t cause too much trouble, but they‘re out there to get us and they‘re growing in menace.

SCHROEN: And I think it‘s true. I think, when you look at the situation, that‘s exactly what‘s happening.

MATTHEWS: “First In,” it‘s about our war in Afghanistan, how he fought and it won it.

Thank you.

SCHROEN: Thank you very much.

MATTHEWS: Tomorrow on HARDBALL, we‘ll talk about how to win the hearts and minds of the Islamic world with Queen Noor of Jordan.

And next on the “COUNTDOWN,” does “Star Wars: Episode III” raise questions about U.S. imperialism? The “COUNTDOWN” with Keith coming up.

END

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